Loan Products

Community Banking Loans (CB)

UOB’s principal products are the Community Banking Loans. Group members typically operate small businesses and have little or no collateral. Therefore, members within a Community Banking group cross guarantee one another’s loans. We have two varieties of Community Banking products:

Traditional Community Banking offers the basic entry level credit program. Group members receive a 4-week training for entry and repay the borrowed money weekly over 16 weeks. This product has the greatest outreach and transformational impact.

Advanced Community Banking (ACB) offers a longer term and flexible payment frequency. It is one of the graduating products for Traditional Community Banking clients.

New Solidarity Group Loans (NSG)

NSG is another graduating credit product for the CB clients, typically those who have collateral and desire to graduate into individual loans but are not quite ready. The NSG allows UOB clients with borrowing experience and debt management skills to borrow a higher loan amount at a lower interest rate with a flexible payment term and frequency. The NSG loans usually require collateral and each member’s social guarantee is limited to the compulsory deposit amount that is provided as collateral. This product is a hybrid of group and individual loans.

Micro-Business Loans (MBL)

Micro-Business Loans are direct-entry products for individual entrepreneurs, as well as graduating products for Community Banking Group or New Solidarity Group clients whose businesses have grown beyond the capacity of the group loan model. These loan products are for customers who are unable to access credit through the formal banking sector due to more stringent collateral requirements, although some form of collateral is generally required. UOB’s MBL products offer standard, preferred, and premier credit programs depending on the client’s business history, borrowing amount, and previous payment history. Under this program UOB is able to accommodate the financing needs of small and medium enterprises.

Micro Consumer Loans

Salary Loans

This loan product is made to wage earners who are paid regular salaries. Customers will use the proceeds for the purchase of consumer goods and other types of domestic consumption. Their salaries are routed through UOB for repayment and they receive the remaining balance.

Motorcycle Loans

Although Rwanda has a limited road system the use of vehicles is on the increase. People will continue to look for economical forms of personal transportation, and the most logical option for many will be the motorcycle.

Micro Leasing

The UOB Micro Leasing product is a means of helping micro-business entrepreneurs make use of equipment without having to commit capital to purchase it. Many businesses have discovered that profits can be made from leasing rather than owning equipment. Leasing allows equipment to be wholly owned by the leaser until the loan is fully paid, at which time a transfer of ownership is made from leaser to lessee.

Agricultural Loans

Agriculture affects approximately 90% of Rwanda’s population. The agricultural sector, also, accounts for roughly one third of Rwanda’s gross domestic product and generates approximately two thirds of Rwanda’s foreign exchange. Thus, it is vital for UOB to provide agricultural credit products and services for the agricultural sector in order to holistically transform rural communities. Agricultural lending will help rural clients access the capital that they need while helping the bank achieve portfolio diversification and market expansion.

Future Loan Products

As a catalyst of Rwanda’s social and economic transformation among the poor and middle classes, UOB intends to add the following to its product offering:

Results-Based financing (RBF) means that a financial incentive is paid to private firms, once a set of previously agreed, well-defined results have been achieved and verified. The financial incentives will motivate private firms to invest in their business, so that markets can start to grow.

Scale economies and/or improvements in the company’s results in reduced unit prices over time, so that subsidies will not be needed in the long run (exit strategy). End-users may benefit from the availability of affordable energy equipment and services in the long run. The Energising Development (EnDev) programme, with financial support from the UK Department for International Development (DFID) is piloting RBF in Rwanda. The pilot phase is expected to last until 2016.

2. Who is a Project Developer?

Private firms, private individuals, and registered associations and cooperatives will be the driving force for implementing RBF activities. NGOs are eligible if they pursue a commercial approach, that is if they are registered as a commercial business in Rwanda. Charities and government organisations are not eligible to register as Project Developer for RBF support. There can be an exception, if these organisations team up with an eligible Project Developer that will be the project implementer and applicant.

3. Urwego Opportunity Bank

Urwego Opportunity Bank of Rwanda, LTD (UOB) is a licensed commercial bank headquartered in Kigali, Rwanda. UOB was created as the result of a merger between Urwego Community Banking, SA (Urwego), and Opportunity International Bank of Rwanda, SA (OIBR) in July 2007. Opportunity International is an international microfinance network (OI Network) dedicated to the development of transformational, commercial microfinance banks in developing countries around the world.

Opportunity International is a pioneer in the microfinance industry with nearly 40 years of experience, having developed more than 40 microfinance institutions in 25 countries throughout Africa, Latin America, Asia, and Europe. UOB seeks to be a financially sustainable microfinance bank, with a nation-wide outreach and a significant holistic impact on each of our customer’s lives.

Urwego was a leading microfinance institution (MFI) in Rwanda founded by World Relief Rwanda in 1997 and from 2004 had been operating as an independent and regulated MFI in Rwanda with a nationwide presence. UOB Ldt was selected to participate in the implementation of the RBF programme and execute the financial management of the fund on behalf of EnDev/GIZ. UOB ltd. will realise the contractual arrangements with the private companies, administer the fund, disburse the RBF incentive, and monitor results.

4. Deliverables

With RBF support, a total of 328,000 solar lights are expected to be sold over the duration of the project life. Detailed as follows:

– 160,000 Latern lights

– 168,000 Room lights

Only quality solar lamps that fulfill the following criteria will be eligible: